HF 51

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:33am

A bill for an act
relating to taxation; individual income; allowing a credit for student loan
payments; proposing coding for new law in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.0678] EDUCATION OPPORTUNITY CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms
have the meanings given.
new text end

new text begin (b) "Eligible individual" means an individual who:
new text end

new text begin (1) graduated from a postsecondary educational institution located in Minnesota,
or from a public postsecondary educational institution located in a state with which a
tuition reciprocity agreement under section 136A.08 was in effect when the individual
graduated; and
new text end

new text begin (2) has a household income under $75,000. For purposes of this section, household
income means income as described in section 290.067, subdivision 2a.
new text end

new text begin (c) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the taxpayer or
taxpayer's spouse.
new text end

new text begin (d) "Postsecondary educational institution" means a two- or four-year postsecondary
educational institution that meets the definition of "eligible educational institution"
provided in section 221(d)(2)(B) of the Internal Revenue Code.
new text end

new text begin (e) "Maximum qualifying amount" is the allowance for tuition and fees most recently
set in law as required under section 136A.121, subdivision 6. For an eligible individual
who graduated from a two-year postsecondary educational institution, the maximum
qualifying amount equals the allowance for tuition and fees specified for a two-year
institution, and for an eligible individual who graduated from a four-year postsecondary
educational institution, the maximum qualifying amount equals the allowance for tuition
and fees specified for a four-year institution.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin An eligible individual is allowed a credit against the tax
due under sections 290.06 and 290.091. The credit equals the lesser of 50 percent of
the amount the individual paid during the taxable year to pay principal and interest on
qualified education loans, or the maximum qualifying amount.
new text end

new text begin Subd. 3. new text end

new text begin Credit carryover. new text end

new text begin If the credit provided under this section exceeds the tax
liability of the eligible individual for the taxable year, the excess amount of the credit may
be carried over to each of the ten taxable years succeeding the taxable year. The entire
amount of the credit must be carried to the earliest taxable year to which the amount may
be carried. The unused portion of the credit must be carried to the following taxable year.
No credit may be carried to a taxable year more than ten years after the taxable year
in which the credit was earned.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end